Australia, US, China Balance Trade

The Australian economy continues to show signs of resistance against market volatility that may have been caused by China’s December figures. The Chinese economy experienced a 20.9% higher export rate and a 19.5% import rate, both of which were not the initial projections for the economy in 2021. The trade surplus generated revenue of up to $94.46 billion as against $73.95 billion Chinese economists and financial managers had projected. Been used to calculate the country’s GDP, the data will positively impact the economy.

Bloomberg had reported that China declared a 4.36 trillion Yuan trade surplus owing to the exploding export that was possibly responsible for some economic headwinds and the government’s restriction on some technology and education outfits. Taking that background into account, 2022 may not be a bed of roses for the Chinese foreign sector.

Chinese Increase and the American Lifestyle

One of the major driving forces of Chinese export is American consumerism. The rapid growth in the Chinese economy putting it at the world’s number may slow down in 2022 compared to what was obtained in 2021 as a result of the monetary policies and fading stimulus packages in the US.

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The ease of COVID-19 restrictions will also have its own toll as economic demand will now move gradually from goods and more into a demand for services. Bearing in mind that China may also introduce a new lockdown, it may go hard to adversely affect the Yuan in the coming days.

Meanwhile, the Australian Dollar that serves as a quick alternative to China’s Yuan to proximity, will probably at this time be of more benefit to keep a tab on monitoring China’s export market directly. Australia has its biggest trading partner to be China so a slowed down growth in China’s economy may have dire consequences for the Australian economy.

The situation has not been so far off as political strain between both countries affected Australia’s exports to China since the third quarter of 2021.

Australian Dollar in Brief

From financial analysis, the Australian dollar seems to trade at a bearish level. A resistance of about 61% needs to be raised immediately.

Recent reports have indicated that the US and its allies are the largest beneficiaries of socio-economic instabilities between China and Australia. It is however in the interest of Australia to ensure stability with China for the sake of its economic progress.

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